Rockets will use amnesty provision on Luis Scola to clear cap space in pursuit of Dwight Howard

In one more significant step in the Houston Rockets’ relentless pursuit of Orlando Magic star Dwight Howard, the Rockets will use the amnesty provision on forward Luis Scola to clear further salary cap space, league sources told Yahoo! Sports.

Houston and Orlando have been in consistent discussions over the past three days, and Houston has shown a desire to stop at nothing to make a deal for Howard and try to convince him to sign a contract extension, sources said. Nevertheless, there’s no trade imminent, nor a deal structure that is anywhere near in place between the teams. Orlando remains in talks with several teams, sources said.

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The Rockets can absorb Howard’s contract, along with Hedo Turkoglu and Jason Richardson. The Rockets are offering multiple first-round picks and a selection of its best, young player assets, sources said.

The Rockets will shed the final three years and $21 million of Scola’s contract, and will file the paperwork with the league office on Friday morning. Dumping Scola will push the Rockets far enough under the cap that they’ll be able to take on multiple contracts from the Magic in a trade for Howard, and still have the space to sign a maximum contract player next summer.

This moves gives the Rockets a chance to try and sell Howard and Los Angeles Clippers guard Chris Paul the chance to play together with the Rockets in the summer of 2013.

Howard has insisted that he would not re-sign with the Rockets, but owner Leslie Alexander and GM Daryl Morey have remained unmoved and unbowed in chasing Howard. Howard had wanted the Magic to trade him to the Brooklyn Nets, but no deal was consummated this week and Brooklyn effectively eliminated themselves from talks until January by re-signing center Brook Lopez to a max contract extension.

Houston still isn’t sure if the Chicago Bulls will match the offer sheet that Omer Asik signed with the Rockets for three years, $25.1 million. The Bulls have sent mixed messages to people about whether they plan to keep Asik, a 23 year old backup center. For the Bulls, there are concerns about how much it will cost to keep forward Taj Gibson next year when he’s a restricted free agent. Also, ownership will likely be resistant to becoming a luxury tax team, or using the amnesty clause on the remaining years of Carlos Boozer’s contract.

The Knicks are assuredly planning to match Jeremy Lin’s $29 million offer sheet.

Scola, 32, will be in demand, and several teams are expected to bid in the amnesty waiver process. Teams under the salary cap can place a blind bid with the league, and the highest bidder under the salary cap can claim Scola and share in the cost of his remaining contract with Houston. Dallas has a strong interest in Scola, league sources said.